A manager hires a labor and rents capital equipment in a very competitive market. Currently the wage rate is Gh₵ 2 per hour and capital is rented at Gh₵ 5per hour, the unit price of the product is Gh₵...

A manager hires a labor and rents capital equipment in a very competitive market. Currently the wage rate is Gh₵ 2 per hour and capital is rented at Gh₵ 5per hour, the unit price of the product is Gh₵ 0.25 and total cost is1000. Suppose the firm’s production is as follows: Q =14K⁰L⁰+10

Required

1. What is the amount of labor and capital the firm should employ in order to maximize profit.


2. What is the maximum profit.